2013 - Reprints: Marketing

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Giving from a distance: Putting the charitable organization at the center of the donation appeal, Journal of Consumer Psychology, 23(2), 197-211, 2013D.
Ein-Gar and L. Levontin
(Reprint No. 240)

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Past research has shown repeatedly that people prefer donating to a single identified human victim rather than to unidentified or abstract donation targets. In the current research we show results countering the identifiable victim effect, wherein people prefer to donate to charitable organizations rather than to an identifiable victim. In a series of five studies, we manipulate temporal and social distance, examine a variety of donation targets, and measure intention to donate time or money as well as actual donations of money. We show that people are more willing to donate to a charitable organization when they are temporally or socially distant from the population in need.Willingness to donate to a specific person in need is higher when donors are temporally or socially close to the donation target. Furthermore, we demonstrate that (a) empathy mediates donations to a single victim, yet does not mediate donations to charitable organizations; (b) that donation giving to charitable organizations is unique and is not similar to donations to a group of victims. Theoretical and practical implications are discussed.

“Wii Will Rock You!” The use and effect of figurative language in consumer reviews of hedonic and utilitarian consumption, Journal of Consumer Research, 40(4), 726-729, 2013
A. Kronrod and S. Danziger
(Reprint No. 243)
Research number: 02130100

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Figurative language in advertising affects product attitudes positively across contexts. In contrast, the present research demonstrates that the use and effectiveness of figurative language in consumer-generated content is context specific, because of conversational norms unique to this form of communication. Study 1 shows that consumer reviews containing more figurative language lead to more favorable attitudes in hedonic, but not utilitarian, consumption contexts, and that conversational norms about figurative language govern this effect. Study 2 reveals that reading a review containing figurative language increases choice of hedonic over utilitarian options. Finally, via analysis of online consumer reviews and a lab experiment, studies 3 and 4 indicate that consumers use figurative language more when sharing experiences about hedonic than utilitarian consumption, and that review extremity influences figurative language use only in reviews of hedonic consumption. The studies highlight the critical role of conversational norms in interpreting and creating user-generated content.

State dependent valuation: The effect of deprivation on risk preferences, PLOS ONE, 8(1), January 2013.
D.J. Levy, A.C. Thavikulwat and P.W. Glimcher
(Reprint No. 254)

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The internal state of an organism affects its choices. Previous studies in various non-human animals have demonstrated a complex, and in some cases non-monotonic, interaction between internal state and risk preferences. Our aim was to examine the systematic effects of deprivation on human decision-making across various reward types. Using both a nonparametric approach and a classical economic analysis, we asked whether the risk attitudes of human subjects towards money, food and water rewards would change as a function of their internal metabolic state. Our findings replicate some previous work suggesting that, on average, humans become more risk tolerant in their monetary decisions, as they get hungry. However, our specific approach allowed us to make two novel observations about the complex interaction between internal state and risk preferences. First, we found that the change in risk attitude induced by food deprivation is a general phenomenon, affecting attitudes towards both monetary and consumable rewards. But much more importantly, our data indicate that rather than each subject becoming more risk tolerant as previously hypothesized based on averaging across subjects, we found that as a population of human subjects becomes food deprived the heterogeneity of their risk attitudes collapses towards a fixed point. Thus subjects who show high-risk aversion while satiated shift towards moderate risk aversion when deprived but subjects who are risk tolerant become more risk averse. These findings demonstrate a more complicated interaction between internal state and risk preferences and raise some interesting implications for both day-to-day decisions and financial market structures.

 

A computational hypothesis for allostasis: Delineation of substance dependence, conventional therapies, and alternative treatments, Frontiers in Psychiatry, 19 December 2013;  DOI: 10.3389/fpsyt.2013.00167
Y.Z. Levy, D.J. Levy, A.G. Barto and J.S. Meyer
(Reprint No. 255)

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The allostatic theory of drug abuse describes the brain’s reward system alterations as sub-stance misuse progresses. Neural adaptations arising from the reward system itself and from the antireward system provide the subject with functional stability, while affecting the person’s mood.We propose a computational hypothesis describing how a virtual subject’s drug consumption, cognitive substrate, and mood interface with reward and antireward systems. Reward system adaptations are assumed interrelated with the ongoing neural activity defining behavior toward drug intake, including activity in the nucleus accumbens, ventral tegmental area, and prefrontal cortex (PFC). Antireward system adaptations are assumed to mutually connect with higher-order cognitive processes occurring within PFC, orbitofrontal cortex, and anterior cingulate cortex.The subject’s mood estimation is a provisional function of reward components. The presented knowledge repository model incorporates pharma-cokinetic, pharmacodynamic, neuropsychological, cognitive, and behavioral components. Patterns of tobacco smoking exemplify the framework’s predictive properties: escalation of cigarette consumption, conventional treatments similar to nicotine patches, and alternative medical practices comparable to meditation.The primary outcomes include an estimate of the virtual subject’s mood and the daily account of drug intakes.The main limitation of this study resides in the 21 time-dependent processes which partially describe the complex phenomena of drug addiction and involve a large number of parameters which may under-constrain the framework. Our model predicts that reward system adaptations account for mood stabilization, whereas antireward system adaptations delineate mood improvement and reduction in drug consumption. This investigation provides formal arguments encouraging current rehabilitation therapies to include meditation-like practices along with pharmaceutical drugs and behavioral counseling.

 

Decomposing the value of word-of-mouth seeding programs:  Acceleration vs. expansion, Journal of Marketing Research 50, 161-176, 2013
B. Libai, E. Muller and R. Peres
(Reprint No. 258)

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In word-of-mouth seeding programs, customer word of mouth can generate value through market expansion, i.e. getting customers who would not otherwise have bought the product, or accelerating the purchases of customers who would have purchased anyway. Here we present the first investigation of how acceleration and expansion combine to generate value in a word-of-mouth seeding program for a new product. We define a program’s social value as the global change, over the entire social system, in customer equity that can be attributed to the word-of-mouth program participants. We compute programs’ social value in various scenarios using an agent-based simulation model and empirical connectivity data on 12 social networks in various markets as input to the simulation. We show how expansion and acceleration integrate to create the social value of programs, and how the role of each is affected by factors such as competition, program targeting, profit decline and retention. These results have substantial implications for the design and evaluation of word-of-mouth marketing programs, and of the profit impact of word of mouth in general.

Product positioning using a self-organizing map and the rings of influence, Decision Sciences, 44, 431-461, 2013
G.C. Hadjinicola, C. Charalambous and E. Muller
(Reprint No. 259)

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In this article, we propose a new product positioning method based on the neural network methodology of a self-organizing map. The method incorporates the concept of rings of influence, where a firm evaluates individual consumers and decides on the intensity to pursue a consumer, based on the probability that this consumer will purchase a competing product. The method has several advantages over earlier work. First, no limitations are imposed on the number of competing products and second, the method can position multiple products in multiple market segments. Using simulations, we compare the new product positioning method with a quasi-Newton method and find that the new method always approaches the best solution obtained by the quasi-Newton method. The quasi-Newton method, however, is dependent on the initial positions of the new products, with the majority of cases ending in a local optimum. Furthermore, the computational time required by the quasi-Newton method increases exponentially, while the time required by the new method is small and remains almost unchanged, when the number of new products positioned increases. We also compute the expected utility that a firm will provide consumers by offering its products. We show that as the intensity with which a firm pursues consumers increases, the new method results in near optimal solutions in terms of market share, but with higher expected utility provided to consumers when compared to that obtained by a quasi-Newton method. Thus, the new method can serve as a managerial decision-making tool to compare the short-term market share objective with the long-term expected utility that a firm will provide to consumers, when it positions its products and intensifies its effort to attract consumers away from competition. 

Thinking or feeling the risk in online auctions: The effects of priming auction outcomes and the dual system on risk perception and amount bid, Journal of Interactive Marketing, 27, 47-61, 2013.
Y. Steinhart , M.A. Kamins, D. Mazursky and A. Noy
(Reprint No. 260)

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The present research sheds new light on the antecedents and outcomes of bidders' perceived risk. It examines the role of the two-system model in the context of activating the potential to either win or lose an online auction. This study demonstrates that when a bidder's affective system is primed, concern about losing the item is greater and ultimately the bid amount is higher when the bidder expects to lose rather than win. Conversely, when the cognitive system is primed, the anticipated goals of winning the auction – rather than the fear of losing – drive the bidder's actions. In the latter case, the bidder pays a higher amount if the expectancy of winning is primed, as opposed to the expectancy of losing. A field study on eBay and two lab studies confirm this phenomenon.

The “temporal-processing-fit effect”:  The interplay between regulatory state, temporal distance, and construal levels, Social Cognition, 31(3), 315-335, 2013 
Y. Steinhart, D. Mazursky & M.A. Kamins
 (Reprint No. 261)

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The current research proposes a moderator of the established effect of temporal construal on the weighting of abstract features versus more concrete features—that of the individual’s regulatory focus. The moderating effect relies on the presence or absence of a fit between regulatory focus and the time horizon for upcoming decisions (i.e., prevention focus/near future or promotion focus/distant future). Under a promotion (prevention) focus, construal levels are higher in the near (distant) than in the distant (near) future. Four experiments find support for this “temporal-processing-fit effect” and provide a perspective on its possible causes, showing that when “fit” is the present state, the event is perceived as more important, being locally processed and construed in a concrete manner, than in non-fit states. In the latter states, the event is processed in a global manner and construed abstractly because it is perceived as less important.

The process by which product availability triggers purchase, Marketing Letters, 24(3), 217-228, 2013.
Y. Steinhart, D. Mazursky and  M.A. Kamins
(Reprint No. 262)

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Both product availability and lack of availability have the potential to trigger the intention to buy. The present research aims to identify the specific processes by which the latter situation of lack of availability drives purchase intention. The research demonstrates that, when lack of product availability is perceived positively, it influences purchase intentions via consumer involvement. However, when lack of product availability is perceived negatively, it influences purchase intentions via perceived feasibility, irrespective of consumer involvement. Two studies confirm the dual indirect effect of product availability on purchase intentions and its underlying processes.

Warnings of adverse side effects can backfire over time, Psychological Science, 24(9), 1842-1847, 2013;  DOI: 10.1177/0956797613478948
Y. Steinhart, Z. Carmon and Y. Trope
(Reprint No. 263)

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Warnings that a promoted product can have adverse side effects (e.g., smoking cigarettes can cause cancer) should dampen the product’s allure. We predicted that with temporal distance (e.g., when an ad relates to future consumption or was viewed some time earlier), this common type of warning can have a worrisome alternative consequence: It can ironically boost the product’s appeal. Building on construal-level theory, we argue that this is because temporal distance evokes high-level construal, which deemphasizes side effects and emphasizes message trustworthiness. In four studies, we demonstrated this phenomenon. For example, participants could buy cigarettes or artificial sweeteners after viewing an ad promoting the product. Immediately afterward, the quantity that participants bought predictably decreased if the ad they saw included a warning about adverse side effects. With temporal distance (product to be delivered 3 months later, or 2 weeks after the ad was viewed), however, participants who had seen an ad noting the benefits of the product but warning of risky side effects bought more than those who had seen an ad noting only benefits.

The effect of an environmental claim on consumers’ perceptions about luxury and utilitarian products, Journal of Cleaner Production, 53, 277-286, 2013
Y. Steinhart, O. Ayalon and  H. Puterman
(Reprint No. 264)

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This research examines how an environmental claim –  an eco-label with a message about a product causing less damage to the environment – differently affects consumers’ evaluations of utilitarian products and of luxuries. The results of two online studies show that consumers perceive an environmental claim as being a utilitarian aspect of a product, and, therefore, such claims may enhance consumers’ evaluations of utilitarian products, especially when the content of the claim emphasizes global-environmental benefits. In addition, the environmental claim may improve evaluations of luxury products by providing available justification to indulge and use luxuries. The latter effect is enhanced when the content of the environmental claim emphasizes personal-social benefits, related to the user’s social status.

Scary health warnings can boost salesHarvard Business Review, 91(10), 30, 2013
Z. Carmon, Y. Steinhart  and Y. Trope
(Reprint No. 265)

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